Creatures with power less than Champion of Lambholt can’t block any creature you control, not just Champion of Lambholt.

5/1/2012

Champion of Lambholt’s ability works even if it isn’t attacking.

5/1/2012

The comparison of power is only done when blockers are declared. Increasing the power of a blocking creature (or decreasing the power of Champion of Lambholt) after this point won’t cause any creature to stop blocking or become unblocked.